Mayr-Melnhof Karton (MM Group) has announced its decision to reduce the planned multiyear strategic investments at its pulp and paper mill, MM Kwidzyn, in Poland.

The company has attributed this move to the uncompetitive wood prices generated by State Forests’ monopoly in the country and the currently low market demand for paper and board products.

MM Group has now shifted the focus of its investments towards increasing its share of renewable energy, which is currently at 69%.

Simultaneously, the company has commenced consultation processes with relevant trade unions and work councils to make decisions regarding the potential closure of its small packaging kraft paper machine (PM 3).

The consultations will also address a reorganisation, which may involve removing approximately 110 employees.

Other operations and activities related to the production of pulp and virgin fibre-based carton boards will continue as usual at the MM Kwidzyn site.

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By GlobalData

In terms of paper production, the paper machines, including PM 1 and PM 2, at the MM Kwidzyn plant will continue to manufacture up to 360 kilotons of uncoated fine paper per year and 40 to 80 kilotons a year of packaging kraft paper or ‘IPACKTM Strong Pro’.

The company will not produce sack kraft paper, as the rebuild of one of its uncoated fine paper machines, which was a part of the planned investment project, is currently on hold.

MM Kwidzyn has been owned by Austrian company MM Group since mid-2021.

The multiyear investment project at MM Kwidzyn was announced earlier this year in April.

Valued at approximately €660m, the project aimed to boost the long-term competitiveness of the Polish pulp and paper plant.

The development encompassed installing a recovery boiler and steam turbine at the factory to execute significant energy cost reductions and minimise carbon dioxide footprint to achieve broader net-zero emission goals.